Boeing slowed production for commercial jets including its grounded 737 MAX and confirmed plans to discontinue the iconic 747 widebody amid dwindling demand from airline customers battered by the coronavirus pandemic.
The planemaker, which has long battled with rival Airbus SAS for dominance in a global duopoly, lost $4.79 a share in the three months through June, nearly twice the $2.54 estimate from Wall Street analysts surveyed by Refinitiv. Sales slid 25 percent to $11.8 billion, Boeing said Wednesday.
An upgrade to the 777X, a twin-aisle jetliner once slated to reach its first customer next year, will be pushed back to 2022 and manufacturing of the 747 will end the same year, CEO David Calhoun said in a letter to employees.
Boeing will cut output of its plastic-composite 787 to six a month next year -- sharpening a previous reduction to 10 a month this year and seven a month next year -- and will consider whether to combine production at one site. The plane is currently built in North Charleston, S.C., and Everett, Washington.
"The reality is the pandemic’s impact on the aviation sector continues to be severe," Calhoun told employees. "Though some fliers are returning slowly to the air, their numbers remain far lower than 2019, with airline revenues likewise reduced."
Boeing now estimates it will take as long as three years for airline traffic to return to last year's levels. As a result, it has trimmed output of the 777 to two a month from three and will slow a ramp-up in production of the 737 MAX, the best-selling jet grounded after two overseas crashes that killed everyone on board.
COVID-19, for which no vaccine is yet available, has infected 16.8 million people worldwide and killed nearly 150,000 in the U.S., prompting stay-at-home orders and temporary business closures in regions around the country. Airline travel as plummeted as businesses conduct meetings via video-conference and vacationers opt for shorter road trips.
Revenue in Boeing's defense division, which has buoyed the company's bottom line, was little changed from last year, at $6.59 billion, as the company won orders from the Navy for three MQ-25 refueling drones and completed first flight and delivery for the third bloc of the service's F/A-18 Super Hornet.